kiwijunglist: From the customers perspective it is pretty much a taxi service, and serves as a cheaper and more convenient stand in to regular taxis.

This perspective is kind of incorrect. Demand pricing is a major component of the business model. If your perspective is that it is always cheaper than a taxi service then you might be surprised.

Yes, but I think I wouldn't be surprised, because I believe a pop up comes up warning you of the higher priced fare? Is this correct?

I personally do not know the answer, I have not yet used the service, but the recent (month or two ago) Herald articles indicated no warning. According to one of those you must specifically click the 'fare estimate' button otherwise you are not going to know high demand pricing until completion.